Statement of Ms. Dong Zhihua, Counselor of the Chinese Delegation at the 2nd Committee under agenda item 19: Follow-up to and Implementation of the Outcome of the 2002 International Conference on Financing for Development and the 2008 Review Conference

2012/10/22

Mr. Chairman,

The Chinese delegation associates itself with the statement made by Algeria on behalf of the G-77 and China.

At present, the international development cooperation faces daunting challenges with ever greater difficulties in financing for development. The overall recovery of the world economy has slowed down, which has given rise to grave uncertainties and risks for a downturn. The negative spillover effects of the sovereign debt crisis of developed countries and their loose monetary policies are increasingly apparent. Developing countries are confronted with multiple obstacles such as weakening external demand, rising trade protectionism, mounting pressure on debt sustainability, and increasing vulnerability and risks of financial markets. All this has squeezed their policy space and constrained their capacity for mobilizing domestic resources for development. In 2011 the total volume of ODA decreased in real terms for the first time since 1997, and it may continue to decrease in the next three years. Furthermore, in order to cope with climate change and promote sustainable development, developing countries need large amounts of new and additional funding; yet there is a huge gap between the need of developing countries and the capacity of international financing for development.

Ensuring adequate and stable development resources is crucial to progress in international cooperation for development. The United Nations should continue its lead role in the area of financing for development, help consolidate and strengthen a win-win global development partnership based on equality and mutual benefit, and implement fully the Monterrey Consensus and the Doha Declaration on Financing for Development. To this end, China proposes that efforts be made in the following areas:

First, promote a strong, sustainable and balanced growth of the world economy. Countries should enhance macro-economic policy coordination and take effective measures to boost market confidence and demand. Developed countries, in particular, should actively carry out structural reforms, achieve a balance between fiscal consolidation and economic growth, adopt responsible fiscal and monetary policies, properly address their debt issue, ensure safety of investments and stable operation of the market, and resist trade protectionism. Developing countries, on their part, should formulate integrated policy measures, work hard to promote growth and employment, strengthen their capacity to withstand external risks, and actively mobilize domestic resources to fund development.

Secondly, step up the implementation of ODA commitment. Public funding remains the core for international development cooperation. Ensuring adequate, stable and predicable core resources is both a fundamental requirement for improving the funding situation of the UN development system, and an essential concern of developing countries. Developed countries should undertake the primary responsibility for financing for development, effectively honor their ODA commitment, and increase their aid particularly to Africa and the LDCs. Financial crisis cannot be used as an excuse to shirk development assistance obligations. The international financial institutions should try their best to coordinate and mobilize resources in order to increase input in development. South-South cooperation is a supplement to and not a substitute for North-South cooperation; developing countries should not take up development assistance obligations that should be shouldered by developed countries.

Thirdly, strengthen global economic governance. The international community should try to create a favorable external environment for the development of developing countries. To this end, it should accelerate the reform of the international financial system to increase the representation and voice of developing countries. It should improve the global financial regulatory system to strengthen the regulation of cross-border capital flows and bulk commodity derivatives. It should reject trade and investment protectionism, and push the Doha round negotiations to achieve the goals of the development round with a view of building a fair, reasonable and non-discriminatory international trade system. And it should further reduce and cancel debts of developing countries and give them greater market access, and work to establish a fair, effective and development-oriented international mechanism for debt reorganization and settlement. We are opposed to willful adoption of economic, commercial or financial blockade measures against developing countries.

Fourthly, strengthen follow-up mechanisms for financing for development. Over a long period of time, the follow-up to the Monterrey Consensus and the Doha Declaration on Financing for Development has been ineffectual, and the level of participation in the GA high-level dialogue on financing for development has been going down over the years. China supports the revitalization of the follow-up mechanism to the Monterrey Conference. We hope the UN and the Bretton Woods Institutions will enhance coordination and cooperation, and taking into account the “sustainable development financing strategy” mandated by the UN Conference on Sustainable Development (Rio+20), make a comprehensive assessment of funds needed by developing countries in order to achieve the internationally agreed development goals and realize sustainable development. We hope to see an effective strategy for financing for development formulated on the basis of such an assessment; and we hope for enhanced monitoring of the implementation of development assistance commitments, the bridging of the gap between commitment and implementation, and steady expansion of the scale of financing for development with its adequacy, stability and predictability ensured.

Mr. Chairman,

As the largest developing country, China still has 128 million people living under the poverty line set by the UN and faces many urgent problems in its development. While working to overcome its own difficulties, China has always tried its best to provide assistance to other developing countries under the framework of South-South cooperation. In the next five years during its 12th Five-Year Plan, China will further increase its input in South-South cooperation, optimize its foreign assistance structure, enlarge the proportion of free aid, and enhance its support particularly to the heavily indebted poor countries, the LDCs and small island developing states. China will continue to take an active part in international financing for development and endeavor for the full implementation of the Monterrey Consensus and the Doha Declaration on Financing for Development.